Musk May Lose Title of 'World's Richest Man' After Twitter Acquisition

"Tesla Stock Halves After April Twitter Acquisition Announcement"

Elon Musk [Photo by Yonhap News]

[Asia Economy Reporter Jang Hee-jun] Elon Musk, CEO of Tesla who acquired social media platform Twitter, may soon be in a situation where he has to give up the title of 'world's richest person,' according to forecasts.

According to the British daily The Guardian on the 9th (local time), Tesla's current market value has dropped to about half of what it was in April when Musk announced his plan to acquire Twitter for a huge sum of $43.4 billion (approximately 56 trillion KRW).

Tesla's stock price was $340.79 (about 445,000 KRW) on April 13, the day before Musk announced the Twitter acquisition, but it has repeatedly fallen due to concerns over the Twitter acquisition and production disruptions at Tesla's Shanghai factory. As of the closing price on the 8th of this month, it plunged 49% to $173.44 (about 226,500 KRW).

To cover the cost of acquiring Twitter, Musk has sold Tesla shares worth about $20 billion (approximately 26 trillion KRW) since April. Reuters estimated that the number of Tesla shares Musk holds has decreased to 445 million shares.

At the current market price, Musk still holds Tesla shares worth about $77 billion (approximately 100.5 trillion KRW), but back in April, the 445 million Tesla shares were valued at $151 billion (approximately 197 trillion KRW), much higher than now.

As a result, The Guardian pointed out that Musk's status as the world's richest person is increasingly under threat. In fact, on the 7th of this month, Bernard Arnault, chairman of the French fashion group Louis Vuitton Mo?t Hennessy (LVMH), temporarily surpassed Musk and was counted as the world's richest person, the media emphasized.

Shortly after announcing his plan to acquire Twitter in April this year, Musk stated at an event held in Canada, "Having a public platform that enjoys great trust from the public is very important for the future of (human) civilization."

However, Tesla shareholders have expressed concerns that Musk, who has been running various other businesses such as the private space company SpaceX, will not be able to properly focus on Tesla management if he also acquires Twitter.

Recently, Bloomberg reported that Musk is considering taking out additional loans using Tesla shares as collateral to repay the high-interest loans he took out during the Twitter acquisition process, which seems to have negatively affected Tesla's stock price. However, The Guardian added that Musk later posted on Twitter, "When there are macroeconomic risks, stock prices can move in directions different from their long-term potential, so it is wise to avoid stock-collateralized loans."